American job growth cools down in November

Non-farm payrolls increase by 155,000 jobs, unemployment rate unchanged at 3.7%

US job growth slowed in November and monthly wages increased less than expected, suggesting some moderation in economic activity that could support expectations of fewer interest rate increases from the Federal Reserve in 2019.

The Labor Department’s closely watched monthly employment report yesterday came against a backdrop of a steep sell-off on Wall Street and a partial inversion of the US yield curve, which have stoked fears of a recession.

“This is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace,” said Paul Ashworth, chief economist at Capital Economics in Toronto.

“There is nothing here to suggest the economy is suffering a more sudden downturn.” Nonfarm payrolls increased by 155,000 jobs last month, with construction companies hiring the fewest workers in eight months, likely because of unseasonably chilly temperatures.

Some of the moderation in hiring in November could be the result of a shortage of qualified workers. But it also fits in with other data showing a rise in layoffs in recent weeks and a decline in a measure of services sector employment in November.

Data for September and October were revised to show 12,000 fewer jobs added than previously reported. Economists polled by Reuters had forecast payrolls increasing by 200,000 jobs in November. The unemployment rate was unchanged at near a 49-year low of 3.7 per cent as more people entered the labour force.

Average hourly earnings rose six cents, or 0.2 per cent in November. October wage gains were revised down to 0.1 per cent from the previously reported 0.2 per cent. In the 12 months through November, wages increased 3.1 per cent, matching October’s jump, which was the biggest gain since April 2009.

Companies also reduced hours for workers. The average workweek fell to 34.4 hours from 34.5 hours in October.

The employment report comes as soft October data on the housing market, business spending on equipment as well as a jump in the trade deficit to a 10-year high have heightened fears the economy is slowing. Growth forecasts for the fourth quarter are around a 2.7 per cent annualised rate. The economy grew at a 3.5 per cent pace in the third quarter.